Let’s be honest—fake reviews have been around longer than the internet itself. But thanks to AI tools, ghostwritten endorsements and synthetic testimonials have leveled up. Now, the Federal Trade Commission (FTC) is stepping in to put a stop to it.
In October 2024, the FTC finalized a new rule that gives it power to seek civil penalties against brands, marketers, and platforms that promote fake product reviews, misleading endorsements, and artificially inflated social proof—including AI-generated endorsements.
If your brand collects, promotes, or hosts reviews, it’s time to make sure you’re not crossing the compliance line—even unintentionally.
What the FTC’s New Rule Prohibits
The new rule targets a variety of deceptive review tactics, including:
- Fake or False Consumer Reviews – Content that misrepresents the identity or experience of the reviewer
- Buying Positive or Negative Reviews – Compensation for specific review sentiments (yes, even discounts count)
- Undisclosed Insider Reviews – Employees, partners, or insiders reviewing without proper disclosure
- Misleading Review Platforms – Company-owned websites posing as independent review sites
- Review Suppression – Deleting or intimidating users to avoid negative feedback
- Fake Social Media Metrics – Buying followers, likes, or engagement to mislead audiences
Why It Matters for Brands and Marketers
This rule isn’t aimed just at shady sellers with anonymous storefronts. The FTC has made it clear: established brands and mainstream marketing teams are also on the hook—especially if they use AI to generate content.
Examples that could lead to trouble:
- An AI tool writes glowing reviews of your product that are posted under fake or composite names
- Employees leave five-star reviews without disclosing their affiliation
- A marketing agency scripts testimonials for influencers without proper disclaimers
- You offer free products or discounts for “honest” reviews—but don’t monitor whether disclosure actually happens
How to Stay Compliant (Without Losing Your Social Proof)
The good news? You don’t have to stop collecting reviews—you just have to do it the right way. Here’s how:
- Set Clear Employee Guidelines – Employees must disclose their connection to your company when leaving reviews. A formal social media risk assessment or employee advocacy policy helps avoid unintentional violations.
- Review Your Influencer Contracts – Work with an influencer lawyer to ensure your influencer agreements require FTC-compliant disclosures—especially if AI tools are being used to generate scripts or reviews.
- Monitor Third-Party Platforms – If your product appears on Amazon, Yelp, or Google, you can’t always control the content—but you can report suspicious patterns, request takedowns, and ensure your own team plays by the rules.
- Avoid Ambiguity in AI Use – If you’re using AI to assist with customer feedback, scripts, or response templates, disclose that information where relevant. Transparency builds trust—and keeps you in the FTC’s good graces.
AI Is a Tool, Not a Loophole
AI can help automate testimonial collection or summarize customer feedback—but it cannot fabricate experience, sentiment, or authenticity. That crosses the line.
The FTC’s stance is clear: if a human couldn’t legally write it, a robot can’t either.
For more, see the FTC’s official press release on AI-generated reviews.
Need Help Reviewing Your Review Strategy?
At The Social Media Law Firm, we help brands review influencer agreements, employee guidelines, and AI-based content strategies for compliance with the latest FTC regulations.
Want to make sure your social proof strategy is as honest as your business? Contact The Social Media Law Firm today to stay compliant—and ahead of the curve.
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